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TMI Blog2020 (10) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... s Appeal the Appellant-Kundan Care Products Ltd., who has emerged as the Successful Resolution Applicant in Insolvency Resolution Process of M/s Astonfield Solar (Gujarat) Pvt. Ltd. ('Corporate Debtor') assails the impugned order rejecting its Application for withdrawal of its Resolution Plan and cancellation/ revocation/ return/ refund of the Performance Bank Guarantee, on the ground that there is no legal basis or justification for holding that an application for withdrawal of a Resolution Plan post approval is not maintainable and that the matter pending consideration before Hon'ble Apex Court viz IA No.9682/2020 in Civil Appeal No.9241/2019 was filed by the Appellant invoking Article 142 of the Constitution of India seeking specific relief in alternate to the relief of withdrawal of the Plan and same had no bearing on IA No.1679/2019 pending before the Adjudicating Authority. 2. It is submitted on behalf of Appellant that there is no basis or justification for the finding that the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 has no power or jurisdiction to allow withdrawal of a Resolution Plan post approval from the Committee of Creditors (for short 'C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Resolution Plan of Appellant was approved in preference to two other Resolution Applicants for maximizing the value of Corporate Debtor and the Appellant cannot be permitted now to scuttle the Corporate Insolvency Resolution Process of the Corporate Debtor by walking away from its Resolution Plan which will have the effect of pushing the Corporate Debtor into liquidation. 4. On behalf of Respondent No.2 (Committee of Creditors) it is submitted that the I&B Code does not prescribe any provision for withdrawal of Resolution Plan by the Resolution Applicant and the Adjudicating Authority is not bestowed with any power to allow withdrawal of the Resolution Plan. Allowing such prayer would be without jurisdiction. It is further submitted that once the Resolution Plan has been approved, it becomes a binding contract between the parties and the Successful Resolution Applicant cannot be permitted to withdraw the same which will have the effect of sending the Corporate Debtor into liquidation. 5. Heard learned counsel for the parties and considered their verbal and written submissions in the backdrop of facts of the case and the circumstances in which the impugned order came to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity decision of the 'Committee of Creditors' other than the grounds mentioned in Section 32 (a to e) of the 'I&B' Code. Moreover, after due deliberations, when the 1st Respondent/'Resolution Applicant' had accepted the conditions of the 'Resolution Plan' especially keeping in mind the ingredients of Section 25(2)(h) of the 'Code' to the effect that 'no change or supplementary information to the 'Resolution Plan' shall be accepted after the submission date of 'Resolution Plan' then it is not open to the 1st Respondent/'Resolution Applicant' to take a 'topsy turvy' stance and is not to be allowed to withdraw the approved 'Resolution Plan'." 6. Before approval of a Resolution Plan by the Committee of Creditors the Corporate Insolvency Resolution Process passes through various stages. After admission of the Application under Section 7, 9 or 10 of the I&B Code, IRP is appointed, moratorium is slapped prohibiting activities enumerated in Section 14, public announcement is made, claims are invited, received and collated by the Interim Resolution Professional, Committee of Creditors is constituted and after appointment of Resolution Professional Expression of Interest is floated inviting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial matrix, capacity of the Resolution Applicant to generate funds, infusion of funds, upfront payment, the distribution mechanism and the period over which the claims of various stake holders are to be satisfied besides the feasibility and viability of the Resolution Plan, a Resolution Applicant emerges as the highest bidder (H1) eliminating the Resolution Plans of Resolution Applicants, which are ranked H2 and H3. The approval of a Resolution Plan by the Committee of Creditors with requisite majority has the effect of eliminating H2 and H3 from the arena. Though, such approved Resolution Plan would be binding on the Corporate Debtor and all stake holders only after the Adjudicating Authority passes an order under Section 31 of the I&B Code approving the Resolution Plan submitted by Resolution Professional with the approval of Committee of Creditors in terms of provisions of Section 30(6) of the I&B Code, it does not follow that the Successful Resolution Applicant would be at liberty to withdraw the Resolution Plan duly approved by the Committee of Creditors and laid before the Adjudicating Authority for approval thereby sabotaging the entire Corporate Insolvency Resolution Proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons) Regulations, 2016 is a step in this direction but may not be deterrent enough to prevent a Successful Resolution Applicant from taking a U-turn. Reliance placed by the Appellant on judgment rendered by this Appellate Tribunal in "Committee of Creditors of Metalyst Forging Ltd. Vs. Deccan Value Investors LP & Ors. - Company Appeal (AT) (Insolvency) 1276 of 2019 decided on 7th February, 2020" is of no consequence as in that case the Resolution Plan approved by the Committee of Creditors was found to be violative of Section 30(2)(e) of the I&B Code. It is in the context of such infirmity that this Appellate Tribunal had observed that the Adjudicating Authority could not compel specific performance of a plan by an unwilling Resolution Applicant. Such observations cannot be treated as a ratio to be followed as a precedent. The facts were entirely different and contravention of Section 30(2)(e) was found to have been established in that case. Same has no resemblance or comparison with the facts of the instant case where the Resolution Plan approved by the Committee of Creditors is still awaiting approval of the Adjudicating Authority. Therefore, no reliance can be placed on the obse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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